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What is disparate impact in housing?

The Fair Housing Act has been shaping housing practices across the U.S. for half a century, but the law itself has not remained stagnant. Protected classes have been added, exceptions have been carved out and language has been clarified. One element that has received a lot of attention in recent years is the disparate impact doctrine.

What does disparate impact entail? Here is a brief overview.

The basics of disparate impact

Disparate impact is a legal doctrine of the Fair Housing Act. Essentially, it states a housing practice or policy may be deemed discriminatory if it has an outsized negative impact on a protected class – even if the language in the practice or policy isn’t explicitly discriminatory.

For example, consider a housing association, condo association or cooperative that only accepts tenants who have full-time jobs. While not explicitly discriminatory, the policy could have a significant, negative impact on veterans or people with disabilities, both of which are groups that may face increased barriers to employment.

Therefore, this policy – though neutral on the surface – may actually be considered problematic.

The conversation around disparate impact

While the concept of disparate impact has existed for awhile, a 2015 U.S. Supreme Court decision affirmed its use. Supporters, including those in Michigan, argue the standard is an important tool in the fight against discrimination. Conversations about the doctrine’s exact shape and scope continue, and the exact nature of the doctrine may change as different administrations institute new Department of Housing and Urban Development (HUD) directives.

The ever-evolving nature of the doctrine underscores the importance of up-to-date knowledge for landlords, housing organizations, board members and others in the industry. If you are involved in overseeing practices or policies for a housing community, it is vital you ensure those items are compliant with the current law – not what the law has previously been.

By being proactive and judicious, you can help prevent discrimination claims from ever bubbling up.